TK's MORNING BUZZ: Copy Depth Has Done Diddly to Cure the Ills of Video Rental It Was Supposed to Fix

I'm going to make a brash and bold statement that's surely going get me a lot of flack from the studios, but here goes:

The various copy-depth initiatives, including (and especially) revenue-sharing, have done diddly to cure the ills of the video rental business that they were supposed to fix in the first place.

If you will remember back to the end of 1997 and the beginning of 1998, when the studios first began to unveil their various plans to put more copies of the hits into video rental stores, their reasoning, at the time, was that this was a necessary remedy.

Rental revenues started to decline a bit in 1997, Blockbuster was in trouble, and the Great Industry Minds that sought to address this problem ultimately concluded that consumers had lost their infatuation with the VCR, and with the video rental experience, because they were sick and tired of walking into their video store and not finding the hot new releases they wanted. The tried-and-true principle of consumer dissatisfaction was dead, the Great Minds proclaimed--and the only way to breathe new life into the video rental industry was to give the customers what they wanted, and plenty of it.

Fast-forward to the present. The typical video store is loaded with the hits, particularly those belonging to the big chains. And yet video rental revenue is essentially flat for the year, while third-quarter reports from most of the big public chains (and Rentrak) say revenues are down because of a "weak slate of titles."

Wait a minute. Isn't that the same thing everyone said in 1997, when rental revenues first started skidding downhill? Months before the studios decided consumers were bored with renting videos because they couldn't find the hits they wanted, I seem to remember that "weak slate of titles" phrase cropping up in almost everyone's financials. Why, if my memory is correct, Warner Home Video even sent John Quinn out on the road with a bunch of charts and graphs and data showing that the collective boxoffice gross of first-quarter 1997 releases wasn't anywhere near what it had been in the first quarter of 1996.

But that point somehow got lost in the Great Industry Think-Tank Sessions that followed, sessions that included Viacom's Sumner Redstone and Blockbuster's John Antioco.

So let me see if I've got this straight. When rental revenues first headed south in early 1997, the culprit was initially identified as a "weak slate of titles," but the ultimate solution was copy depth. Now, three years into copy depth, with the latest hits in more-than-ample supply at virtually every video rental store on the planet, we're once again hearing that a "weak slate of titles" is to blame for many retailers' current woes.